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Sunday, May 16, 2010

The Quest for the Bottom Line

Posted on 8:31 AM by Unknown
I guess it is no secret that newspapers are struggling financially these days.

The reasons are complex, but one reason seems clear to me. As I wrote a couple of months ago, most newspapers failed to recognize the internet for the threat it posed back in the days when the internet was still emerging and was not yet a fixture in American homes.

In fact, I recall a day back in the 1990s. Newspapers still seemed to be healthy, although circulation, as always, was down. I never worked in advertising, either classified or display, so I don't know if a downward trend was noticeable in that department. As far as I knew at the time, there was no warning sign that the horizon was not sunny for newspapers.

I was teaching journalism to undergraduates, and one of my students came to me with a question that seems positively prophetic in hindsight. He wanted to know what I thought would happen to newspapers in the digital age (which hadn't even begun to blossom yet).

I'm almost ashamed to admit now that my answer must have revealed a certain naivete on my part. It certainly must have shown a lack of vision.

Sometimes I wonder if that young man remembers that exchange. With some newspapers going under and others slashing their staffs dramatically to remain afloat a little while longer, I can't see how he wouldn't think back on it. If he does, I wish I could assure him that I'm not as naive now as I must seem when I am seen in one's rearview mirror.

Admittedly, peering into the future is not an easy thing for anyone to do. That doesn't prevent many people from trying to anticipate future events, anyway, though, and, by the time this student asked me that particular question, I had heard plenty of gloom–and–doom predictions from others that never came to pass.

And my inclination at that time was to dismiss the idea that the existence of newspapers was, in any way, threatened. So I told my student that I believed newspapers and the internet would find a way to co–exist.

I still believe that will happen eventually, but many newspapers have already paid the price for management's failings and many more almost certainly will in the next few years. The number of newspapers that will survive these turbulent times and establish a mutually profitable relationship with the internet will be far smaller than I — or, I dare say, anyone else — ever dreamed.

Let me ask you a personal question here.

At one time or another, everyone loses something or temporarily misplaces something. On those occasions, have you ever found yourself searching the same locations over and over?

You might search new locations as well, but did you gravitate back to the same locations, too?

Perhaps you did that because you genuinely forgot that you searched a location before (and, if that is the case, you may have a different set of issues to resolve).

But perhaps you did that because you just knew that what you were looking for had to be in that location, and each time you searched it, you did so believing you had overlooked something that was obvious.

I'm getting the impression that newspaper management operates by the latter approach. I make specific reference to the New York Times.

And it sort of proves what Albert Einstein said. He said that the definition of insanity was doing the same thing over and over and expecting a different result.

Well, the Times is about to do something that it tried to do before, but it didn't work.

MarketWatch reports that the Times will start charging for online content in January.

Doug Mataconis mirrors my own thoughts at Outside the Beltway when he points out that the Times tried something like this a few years ago and failed.

The Times introduced something it called Times Select, in which users were charged for access to Times content, but it was dropped after awhile. I've never been privy to Times business strategy sessions, but I assumed that they discovered what I predicted at the time:

With all the free sources for news and information on the internet, most non–New Yorkers simply weren't interested in paying to read the Times four or five years ago. I suspect that even fewer will be willing to do so in today's economy.

Consequently, I predict that this pay–per–view strategy also will fail.

I understand the impatience of Times management to try to recoup its losses. I understand how frustrating it must be for the Times' publishers — not to mention its writers and editors — to think of all those people out there in Internetland who read their articles for free.

But the time to get in on the ground floor of the internet — and collect some of that seemingly endlessly easy money that was circulating in the so–called "dot–com" period — was 14 or 15 years ago. That ship has sailed. Some would say it sank.

Anyway, this is a different era. Newspapers — well, not all of them, but some of them — still can prosper in the digital age. But they're going to have to dedicate themselves to long–term goals. There are no get–rich–quick scenarios for newspapers, even if they resolve their business model issues — which shouldn't be a surprise to anyone who has been in the business for awhile.

After all, unless a publisher already has a fortune that was made elsewhere, he can't reasonably expect to make his fortune from newspaper ownership. There are too many expenses and too little revenue from a product that typically sells for 25 cents or 50 cents an issue.

But the next best thing, it seems to me, is to make the publication indispensable — and achieving that may require some publishers and their publications to take even more of a loss for awhile than they've had to absorb recently.

If they are wise, they will look at it as an investment in the future.

There is no shortage these days of online news organizations that are willing to sacrifice everything else, including accuracy, to be the first to report something. Often, it turns out that what is reported is little more than gossip and speculation, and much of the time, it is wrong, but it is followed — often, at best — by a terse article acknowledging an error.

Some of these organizations ignore their mistakes entirely — in those cases, I guess it goes without saying that the errors go without saying. Sometimes, the readers are never told that they were given false information. The organizations don't acknowledge their own complicity in its perpetuation — and, if their deception is revealed, it is hard to regain the readers' trust.

Trust. Now, that is what I'm talking about.

In these days of be first even if you're wrong journalism, I believe the news organizations that build reputations on providing reliable information, even if it isn't first, will make themselves indispensable.

And it is when a news organization is seen as indispensable that its users will pay to continue receiving it.

Generations ago, the New York Times was known as the "newspaper of record." If you saw it in the New York Times, you knew it was true.

I don't live in New York. I read the Times online. I don't know if it still advertises itself as the newspaper of record, but, if it does, that is just one more mistake the modern Times makes. I often see errors in the Times — some are small, some are not so small. It may have a cracker–jack copy desk, but if the Times calls itself the newspaper of record, it is living on its past glories — while it is being pigeonholed by modern readers as little more than a mouthpiece for leftist columnists.

Building a reputation for reliability takes time, and it takes the efforts of talented copy editors to make it happen. I hear people complain all the time about the declining quality of print journalism, yet newspaper management continues to respond to tough economies in a time–honored way — cut the copy desk first.

These days, it is fashionable to talk of how efficient online journalism can be, allowing the reporter in the field to write his/her article on the spot and post it directly to the internet.

And it certainly would be an efficient method — if writers performed all the functions of the copy desk (and copy editors do a lot more than simply make sure a writer didn't write y–o–u–r when he/she should have written y–o–u–'–r–e).

But most of them don't. Most reporters don't worry about the details.

If the New York Times — and other news organizations, both online and offline — builds a reputation for worrying about the details, I think it will enhance its value to a public that wants to know it can rely on what it is being told.

But it can't be achieved overnight.
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